Lego posts first sales fall for 13 years

Lego has reported its first fall in annual sales for 13 years after a "challenging year" for the toymaker in its European and North American markets.

Revenues fell 8% to 35bn kroner (£4.2bn), largely thanks to efforts to reduce its excess stock. Its operating profits were down 17% to 10.4bn kroner (£1.2bn).

Niels Christiansen, chief executive of the privately-owned Danish company, said Lego had ended the year with growth in most of its main markets and started 2018 "in better shape".

But he warned: "There is no quick-fix and it will take some time to achieve longer-term growth."

The sales decline was the first since 2004 and compares to an increase of 6% in 2016 and 25% the year before that.

Mr Christiansen said: "2017 was a challenging year and overall we are not satisfied with the financial results."

Lego said that apart from efforts to clear out its build-up of stock, consumer sales were flat, with a decline in established markets in North America and Europe balanced out with growth elsewhere including a double-digit upturn in China.

The company's Lego Ninjago series benefited from the release of The Lego Ninjago Movie in September.

The results come after Lego announced in September that it was cutting 1,400 jobs, or 8% of its global workforce in an effort to "reset the company".

Mr Christiansen joined in October, taking over after the eight-month tenure of British chief executive Bali Padda.

Lego is hoping to revive its flagging performance by increasing sales in Asia and embracing the digital age.

It said in a statement: "In 2018, the group will stabilise the business and invest to create a platform for sustainable longer-term growth."

The results represent the latest sign of the struggles facing the sector after the collapse of Toys R Us in the UK, following the bankruptcy of its parent company in the US.

Mattel, which makes Barbie dolls and owns Fisher-Price, has reported an 11% fall in sales for 2017.

But US rival Hasbro, which is behind Monopoly and Star Wars toys, saw growth.